MP3 audio file of this article, read by Floy Lilley, is available
Guido Hülsmann’s latest book, The
Ethics of Money Production, is a vastly enriching experience.
After building his case for natural money on the inviolability of
an individual’s right to his own property, he then shows us how
the state has spent the last 400 years usurping this right for the
benefit of a privileged few through its protection of fractional-reserve
It is the state’s
insatiable appetite for revenue, he argues, that is the motivation
behind the various monetary schemes it imposes on us, which on an
international level begins with the classical gold standard and
runs through today’s paper-money agreements. Although he doesn’t
discuss the current economic crisis directly, his observations provide
a much-needed correction to government’s "do something"
In this essay,
I will touch on some of Hülsmann’s more salient points, beginning
with the origin of money.
Money versus "Forced Money"
We know that
in a barter economy the division of labor is primitive because trade
is limited by the double coincidence of wants. A carpenter who needs
shoes finds a shoemaker who needs a chair, and they enter into a
mutually acceptable trade. But trade is also limited by the makeup
of the goods themselves – how will the carpenter acquire a
small amount of flour with the chair he has built?